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What are the Benefits of Personalised Product Recommendations?

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Don’t you love it when you walk into your local coffee shop and being asked “the usual”? Or receiving emails that are relevant and personal to your interests?

As customers, we love that personal touch, when someone remembers our names or birthdays. It can make us feel like we’re their single most important customer.

What is Personalisation?

Personalised marketing used to be simple, by adding the customer’s name to the emails they receive from companies. Nowadays, personalisation is so much more – It’s allowing for deeper and more meaningful customer relationships, which encourage higher conversions, increases the average order value and increase customer engagement. According to the Aberdeen Group, personalised emails improve click through rates by 14% and conversion rates by 10%. Yet, 32% of firms still don’t bother with personalised marketing.

SO… WHAT ARE THE BENEFITS?

There are a range of ways that personalisation can benefit a company and increase the customers experience with the company. Below are a few examples:

1 | Increase Conversions

When you tailor your messages to your reader, you make the customers feel more important. By remembering past behaviours, companies can present relevant product or

Offers that appeal to particular customers. Personalisation can help to achieve this in several ways via email, including:

  • Subject Line – personalised with the recipient’s name, company’s name, or topic of interest using dynamic tags
  • Email Copy – greet the reader by their first name, references to their prior behaviour using a relevant dynamic call-to-action
  • Landing Page – reiterates the message delivered in the email, and features smart fields pre-loaded with the recipient’s information, such as; purchase information, shipping addresses, or other details

Watch the video below for full information on Conversion Rate with Personalised Recommendations:

https://www.youtube.com/watch?v=MOpanciAx2Y

2 | Increase Average Order Value

Average Order Value (AOV) is an e-commerce metric that measures the average total of every order placed with a company over a set period. Through personalisation, companies can increase this by having, “customers who brought this, also brought” either at the bottom of the page or at the check-out stage, this is to encourage customers to add products to their basket. An example of this is The Body Shop, when you select a product, at the bottom of the page is ‘recommended products’ that work well with the chosen product.

3 | Increase Customer Engagement

Stated simply, customer engagement is the depth of the relationship a customer has with a brand. Making the experience personal, helps to increase engagement levels and customer loyalty.

Personalised content or messages can keep customers on the site for longer, as the personal edge will encourage them to click or read on. Companies could look at offering deals to certain customers, for example; if they are new offering 10% OFF FIRST TIME BUY or for a loyal customer offering them FREE DELIVERY FOR A LIMITED TIME ONLY.

Having the customer’s information saved, increases customer engagement as the customers don’t have to keep inputting their details, such as; delivery address, payment details etc. For returning customers, it also allows companies to show specific messages or content that is relevant for them, so that no same customer sees the same landing page.

FINAL THOUGHTS…

If done right, an e-business can collect enough information on their customers to personalise their shopping experience, which can bring them back again and again, and keep them as loyal customers (Flore, 2001). However, although personalisation has its benefits, companies need to consider not bombarding customers with personalised emails, as this can lose its affect or make sure that the information they are sending to their customers is relevant and in-line with their interests.

 

References

Barsby, A. (2016). 9 Benefits of Personalisation for Digital Marketing. Available: https://www.e-xanthos.co.uk/blog/9-benefits-personalisation-digital-marketing/ Last Accessed: 4th April 2017

Fiore, F. (2001). E-Marketing Strategies – The How’s and Whys of Driving Sales Through E-Commerce. 1st ed. Indiana: Que

Leslie, B. (2016). 5 Reasons Personalised Marketing is Essential. Available: http://figarodigital.co.uk/article/5-reasons-personalised-marketing-essential/ Last Accessed: 4th April 2017

Wainwright, C. (2012). 9 Undeniable Advantages of Using Personalised Content in Your Marketing. Available: https://blog.hubspot.com/blog/tabid/6307/bid/33971/9-Undeniable-Advantages-of-Using-Personalized-Content-in-Your-Marketing.aspx#sm.00000kr6tqj132e1ypmc1dh0h1ge3 Last Accessed: 4th April 2017

What are the Risks of Personalised Product Recommendations?

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Have you ever received personalised recommendations from your favourite brand? Has this lead to you buying those products? Or thinking they were actually good recommendations?

Once you’ve signed up to receive newsletters from your favourite companies, some places think it’s okay to bombard you with emails about information that isn’t relevant to you, some send the occasion email with products that are ‘personal’ to you as a customer. But are they ever actually personal to you? Or is the same email sent to millions of other customers? ‘A survey about marketing messages conducted by Lyrics revealed that 63% of consumers report that they now receive so many messages that use their name that it no longer has any impact’ (Davey, 2014).

Doesn’t it make you wonder how much your favourite brand knows about you? Where are they getting this information from? This blogs looks at the risk/problems for companies who send personalised product recommendations to their customers via email or on their website as the consumer is about to purchase something from them.

SO… WHAT ARE THE RISKS?

Most negativity about personalised recommendations, come from the customer side and this is either due to the products they have been recommended are something they would never normally buy and doesn’t suit you at all or it’s too specific and it’s a combination of products that the consumer has already purchased.

1 | Privacy Issues

Some consumers can see it as being invasive when companies use a system that recommends products based ‘on the demographics of the consumer, or on an analysis of the past buying behaviour of the consumer as a prediction for future buying behaviour’ (Zhang et al, 2015). Therefore, running the risk of invading a person’s privacy and this could have a damaging impact on their loyalty to the company.

2 | The Filter Bubble

A filter bubble is a result of a personalised search in which a ‘website algorithm selectively guesses what information a user would like to see based on information about the user’ (Bozdag & Hoven, 2015). This is a problem because it means that customers will only be seeing products that are based on what they have purchased in the past and leaving out potentially new products that could equally be as beneficial to the consumer.

Watch the video below for full information about the filter bubble.

 

An example of this, is that within The Body Shop, they have a variety of different ranges of products which use different ingredients and are for different skin types, skin problems etc. However, if you buy from one specific brand range, you only see products recommended within that brand range.

 

Therefore, this is limiting customers to only buying within that specific range rather than them being recommended products from different ranges within The Body Shop.

3 | Accurate Data

 There is nothing worse than getting recommended products that have no interest in you as a consumer and it makes you wonder how accurate the data the company is using. Is there any way you can trust their recommendations in the future after they’ve failed to recommend you anything within your interests?

Sandra McDill, managing partner at iProspect, stated “mistakes often happen when assumptions are made based on data that is incorrect or incomplete leading to a bad personalisation experiences”. Therefore, making sure that the company has a system in place that checks the accuracy of their database before making personalised recommendations is vital.

Netflix had a problem with their recommendation system when if more than one person had access to the account and each had different tastes in movies, the algorithm would be less likely to select things that either liked. However, this was fixed when Netflix rolled out the ability to add multiply profiles to one Netflix account, allowing Netflix to recommend movies and TV series to each individual profile rather than as a whole to the account.

FINAL THOUGHTS…

There needs to be systems in place to make sure that the customers feel comfortable with what their details and browsing/purchasing history is being used for. If the recommendations become to personal, this could put the customer off from using that specific company to purchase. However, it is the companies’ responsibility to make sure that although they need to filter the information for the customers, that it’s not too filtered and that they aren’t missing out on products that could be beneficial to them, even if it may not be within their interests.

It’s always good to try something new every now and again!

References:

Davey, N. (2014). Personalised marketing: the wrongs, the rights and the recommendations. Available: http://www.mycustomer.com/marketing/strategy/personalised-marketing-the-wrongs-the-rights-and-the-recommendations. Last accessed 28th Feb 2017.

Fidura, S. (2015). Why email marketing is still the leader of the pack.Available: http://www.telegraph.co.uk/sponsored/business/business-reporter/11127852/email-marketing-platform.html. Last accessed 28th Feb 2017.

Zhang, Y., Qi, J., Shu, H. & Cao, J. (2007). Personalised product recommendation based on customer value hierarchy, IEEE, , pp. 3250.